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Question: 1 / 400

How would you calculate gross potential rent (GPR) for an apartment building?

By adding leasing commissions to monthly rent

By multiplying occupied units by average rent and vacant units by market rent

Calculating Gross Potential Rent (GPR) involves assessing the maximum income an apartment building could generate if all units were rented at market rates. This method accurately accounts for both occupied and unoccupied units. By multiplying the number of occupied units by the actual average rent and the number of vacant units by the market rent, you can derive the total potential income that the property could achieve if all units were leased at current market rates.

This approach recognizes that vacant units still hold value as they represent potential income. It’s essential to base the calculation of vacant units on market rent since this reflects the revenue that could be obtained in the current market environment, providing a comprehensive view of the property’s income potential.

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By subtracting liabilities from the total income

By summing up total expenses incurred

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